5 Red Flags to Look for When Job Searching in a Recession

While the media may be fascinated by the concept of “quiet quitting” at work, many tech professionals in the U.S. are not-so-quietly trying to find a job. And as if times aren’t strange enough, the rumors of a recession have made large tech companies like Google and Netflix scale back their hiring or even lay off employees. According to Crunchbase, more than 41,000 people have been laid off from the U.S. tech sector in 2022. They warn that startups will feel the pressure next, especially those that benefited from a pandemic boom. Also, experts report that raising new funding in this environment is becoming more challenging.

But the labor market is still hot in some areas of tech, mainly because of pandemic-induced job turbulence. H.R. professionals say that tech workers are still well-positioned to look for a new job or land on their feet if they’re laid off. So, if you are looking for a tech job, don’t give up! The jobs are there, especially in startups. You just need to find the perfect one.  

Searching for a job in this unstable and just plain weird market can be challenging. Companies are hiring employees, then laying them off almost as quickly. So how can you be sure a job you are interested in is with a solid and sustainable startup? 

We got you. Here are 5 red flags to look for as you search for your dream job. If you see evidence of these red flags during the hiring process, think twice about accepting an offer. 

1. Non-transparency

Transparency is the name of the game in the hiring process. Consider your interviews to be a two-way street. You are interviewing them just as much as they are interviewing you. Ask probing questions to ensure you are a good fit for this company. 

If the hiring manager is cagey or evasive about these company details, think twice about working there. 

  • Runway: they should understand how much cash the company has to spend 
  • Fundraising details, including timeline and investors
  • Company valuation
  • Equity value
  • Strategic plan/metrics/goals
  • Current or past employee referrals
  • Past layoffs

These details can usually be found in an investor deck. Be prepared to sign a non-disclosure agreement to view it.

2. High employee turnover

Every HR professional should know what their company’s turnover rate is. While startups typically have higher turnover than other companies, there is still cause for concern if that rate is over 25%. Ask your interviewer why so many employees are leaving and what the company is doing to change that. If they can’t or won’t tell you about the turnover rate, ask each interviewer how long they’ve been with the company. That will give you a general idea.

3. Questionable recruitment practices

While getting in on the ground floor of something new and innovative may be exciting, that does not mean you are required to forgo basic things like salary and job security. If your recruiter mentions these details during recruitment, consider them red flags:

  • The recruiter asks you to accept “perks” over salary
  • The recruiter asks you to accept equity with no valuation
  • The recruiter asks you to “test” for a role with unpaid work
  • The recruiter skips the interview process entirely and offers you a job

4. Work experience issues

Work experience may not be as important as grit and determination in making some startups successful, but it certainly doesn’t hurt. In many startup H.R. departments, work experience can be regarded in one of two ways. It is the first thing thrown out the window when a startup needs to cut corners on salaries, or it is expected but not compensated for. 

This skewed view of work experience in many startups can be a downfall. Some red flags to consider are: 

  • Everyone at the company is an intern or fresh out of college.
  • The founders do not have management experience or a track record of success.
  • They have unrealistic expectations for a job, such as requiring years of experience for an entry-level role.
  • The interviewer downplays your work experience in an attempt to lowball an offer.

5. Evidence of culture issues

Having a positive and supportive place to work is critical for any job, even more so if you are joining a fast-paced and collaborative startup where every day is something new. It can be challenging to spot culture issues during the interview process, so be prepared to ask very pointed questions to spot these red flags. 

  • The interviewer becomes defensive, negative, or even shuts down your questions.
  • The recruiter ghosts you after you ask questions.
  • The interviewer gossips about past or current employees.
  • The interviewer emphasizes the “Work hard, play hard” mindset. This tends to signify a “bro” culture. 
  • The interviewer uses language that puts the company first (“obsessed with results”/”team player”).
  • Conversely, they use language that describes the team as “family”. Employees are less likely to report wrongdoings if an employer promotes a tight-knit family culture.

The best advice we can give you is to trust your gut. Notice how you feel after each interaction with the company. If you feel uneasy, unsettled, or unsure, that is the ultimate red flag. 

Working with a startup is often riskier than other jobs, but it can also be more rewarding, especially if you believe in the company’s mission and vision. Let those aspects drive your decision and if you have any doubts, walk away. Trust that a better role is waiting for you, just around the corner. 

In fact, Lady Bird Talent supports talent efforts with early-stage companies that are building innovative solutions and prioritizing inclusion as they build and scale their cultures. Check out our job board to learn more about these companies and what they have to offer.

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